E. SCOTT RECKARD

Jul. 17, 1992

BEVERLY HILLS, Calif. (AP) _ Critics of rapper Ice-T raged against his sexually explicit lyrics and ''Cop Killer'' song, transforming the annual meeting of Time Warner Inc. into a day of strife.

The world's biggest media company told shareholders Thursday that financial results improved in all five divisions. Co-Chief Executive Gerald Levin announced a 12 percent increase in the common stock dividend and a 4-for-1 stock split.

But those details, like the company's box office smashes ''Lethal Weapon 3'' and ''Batman Returns,'' were overshadowed by the furor over Ice-T's ''Body Count'' album, featuring compositions such as ''Cop Killer'' and ''KKK Bitch.''

Police leaders, conservative activists and officers blinded by shotgun attacks urged Levin and the board of directors to pull the album. Saying ''Cop Killer'' advocates killing police, they threatened to boycott Time Warner products and sue if the song leads to violence.

''This blood's going to be on your hands,'' said Ron Allen, a black policeman from Westfield, N.J.

''You are sick 3/8'' Tom Scotto, the president of the New York police detective union, shouted at Levin.

Heston, a crusader for conservative causes, read lyrics to ''KKK Bitch,'' in which Ice-T describes a sexual fantasy about a trip to the deep South. In that song, the rapper fantasizes about falling in love with 12-year-old nieces of Tipper Gore while his buddies have sex with Southern Nazi and skinhead girls.

In the excerpted version read by Heston, the text implied the singer had a brutal fantasy sexual encounter with a young niece of Tipper Gore.

However, the actual text of the song as it is played on the Ice-T recording is somewhat different. In that song, Ice-T appears to be referring to a sexual encounter with the daughter of a Ku Klux Klan member.

Carol Lanning, a personal assistant to Heston, said it was her understanding that the actor used the lyrics from the album jacket. She said Heston could not immediately be reached for comment.

Mrs. Gore, the wife of Democratic vice presidential nominee Albert Gore and an advocate of warning labels on explicit-language records, declined comment through a spokeswoman.

Dismissing Ice-T as only ''trying for his 15 minutes of fame,'' Heston told Levin it was company officials who should be condemned.

Several shareholders, however, rose to defend the company.

''Time Warner serves as a forum for diverse and often conflicting opinions, and I hope it never stops,'' said Stephen F. Rohde, a Los Angeles lawyer and shareholder.

He denounced the calls for ''the quick fix of trying to obliterate Ice-T's lyrics'' rather than address the social injustice which gave birth to those words.

Levin said the record won't be recalled, though he said Time Warner will produce commercial-free TV shows debating the issues it raises and hold similar forums at major urban universities.

Levin acknowledged that ''Body Count' is phrased in the raw language of the streets. But he said it is a bitter protest meant to express rage and frustration at police brutality and systematic racism.

''What would it profit anyone if in the name of pleasing everyone the country's leading media and entertainment company ceased to risk saying anything worth listening to?'' he said to loud applause from shareholders.

Many critics suggested that Time Warner, particularly its record division, has lost sight of its social responsibilities in a quest for profits.

But Levin said the effects of Ice-T's music on Time Warner's bottom line are negligible, and not a factor in the company's decision not to withdraw ''Body Count.''

''It is not a call for anti-police violence,'' Levin said.

''If the lyrics aren't lifted out of the context of Ice-T's work, if you listen to the different voice he takes on, the different characters he plays, if you hear the different messages he gives - against drugs, and gang violence, and racism - it's clear that what the artist is doing is depicting the despair and anger that hang in the air of every American inner city.''

The company reported it earned $9 million in the second quarter, its third consecutive quarterly profit after a series of losses following the 1990 merger that created the company. It lost $32 million in the April-June period in 1991.